Enterprise Bancorp, Inc
Annual Report 2015

Plain-text annual report

2015 Annual Report THE ROOTS OF OUR Strong Growth & Consistency Integrity Community Excellence Teamwork Professionalism Table of Contents Our Stories Letter from the Chairman, CEO, and President A Tribute to Founding Director, Arnold S. Lerner Selected Financial Data Branch Locations & Board of Directors 1 4 9 30 About the Cover Just as a tree is only as strong as the roots supporting it, the strength of Enterprise Bank is rooted in the core values and principles on which we were founded. As a truly independent and purpose-driven community bank, our core values of integrity, community, excellence, teamwork, and professionalism have served as the foundation of our growth and success—and will continue to guide us into the future. 10 12 Challenge Unlimited at Ironstone Farm Home Health Foundation 14 16 Humane Society for Greater Nashua Mammoth Fire Alarms, Inc. 18 20 Payright Payroll The Napoli Group 22 24 EasyPak Town Market Andover 26 28 Applewild School Concord Riverwalk  Enterprise Bank: A Strong Foundation Supports a Bright Future Enterprise Bank’s strength comes from our core values, deep sense of purpose, and proven operating principles. As an entrepreneurial, independent commercial and community bank, our core values of integrity, community, excellence, teamwork, and professionalism, have been the foundation of our strong growth since inception. We have always operated under the principles of We experienced an exceptional year of loan maintaining a long-term market and shareholder growth, 11% or $187 million, attributable to our orientation, while employing steady geographic outstanding lending, business development, and expansion. Enterprise team members carry with branch teams. them the mindset that they are part of something far greater than themselves, with a passionate mission to create success for our shareholders, our customers, and our communities as a whole. In this annual report, our customers, our Enterprise Bankers, and our community members share what Enterprise Bank means to them. Our Growth Enterprise Bank had a terrific 2015. Asset, loan, deposit, and net income growth was 13%, 11%, 14%, and 10%, respectively. These are exceptionally strong results. Our 2015 customer deposit growth of 14%, or Our consistently strong year-after-year growth has led to a doubling in bank assets from seven and one-quarter years ago. To further put our asset growth of $263 million in 2015 into perspective, it took from our inception in 1989 into the third quarter of 1996 to cross the $263 million asset mark. As of December 31, 2015, we surpassed $3 billion in total assets under management, celebrated our 105th consecutive quarter of profitability, and our 26th consecutive profitable year, and increased our annual dividend for the 24th consecutive year. $228 million, was driven by numerous new In December 2015, we broke ground on a new municipal, non-profit, and business relationships, branch location on Amherst Street in Nashua, in part, the result of our progressive and NH. This will be our 23rd branch, our second enhanced cash management capabilities. branch in Nashua, and our sixth branch in 1 Southern New Hampshire. We continuously evaluate potential caring, pride, and personal accountability. We share a heartfelt new branch locations that will either fill-in or expand our sense of responsibility to each other, to our customers, and to geographic footprint. While we are extremely proud of our strong growth last year, the true value of that growth is reflected in what it means for our customers and communities. Growth ties directly to our communities. We are committed to each team member’s growth and success, and take seriously our investment in their future. Team members are supported through extensive training, development, coaching, and mentoring. our ability to extend credit, which in turn allows businesses, Recognizing our culture and commitment to each other, the entrepreneurs, non-profit organizations, and professionals of Boston Globe named Enterprise Bank as #4 among large-sized all sizes and industries to create success of their own. Since companies in the 2015 “Top Places to Work in Massachusetts.” our inception, we have held true to our purpose to help create This recognition is a reflection of the spirit and purpose on successful businesses, jobs, opportunities, wealth, and vibrant, which Enterprise Bank operates. prosperous communities. Our Capabilities Our continued success, growth, and culture starts with the example, direction, vision, and leadership of Enterprise Bank’s Board of Directors. We express our deepest appreciation and Enterprise Bank continues to further differentiate itself from our gratitude to each board member. peers by offering increasingly advanced products, technology and services, delivered by professionals who truly care about Our Community their customers and communities. We take seriously our role as an economic engine to help fuel Other than the large national and U.S. regional banks, very the local economy, as a committed philanthropic neighbor, few banks have the product and service capabilities that and as a corporate citizen that gives back generously to we offer. These include highly knowledgeable commercial the communities we serve. We feel that we are as “true” a lending expertise, sophisticated mobile and digital banking, community bank as any bank in America. extensive cash management services, comprehensive wealth management and trust services, and advanced commercial insurance services. We continually invest in technological innovations and products, along with a wide range of services to benefit our customers. Our Team Enterprise family members embrace the spirit of volunteerism, serving on more than 550 non-profit and charitable boards. Our commitment to community was recognized by the Boston Business Journal as we were ranked second among all Massachusetts companies for the hours spent by employees in community service. In 2015, Enterprise Bank financially supported more than 350 such organizations. Helping to create Working together among our team members, customers, strong and caring communities is one of our core operating communities, and shareholders, there is nothing we cannot principles, and we commend and thank our team who make accomplish. Our Enterprise team has made Enterprise Bank such a difference in the lives of so many. what it is today and they will always be our greatest asset. Above all else, what separates us from other banks is our talented team. Enterprise Bankers have a passion for one-on- one customer counseling, understanding each customer’s unique needs, and establishing long-term trusting relationships. Enterprise Bank’s Non-Profit CollaborativeSM (NPC) is another way that we demonstrate our commitment to our communities by providing programs and resources to benefit these valuable organizations. Our educational forums and speaker presentations address topics critical to the success of non- Our team members are deeply committed to Enterprise Bank’s profits, from fundraising and board development to financial culture. We hold each other to high standards of excellence, management and social media. 2 Our Position and Opportunity We are in a favorable and strong competitive market position and we believe that we have significant opportunity in the years ahead. Our asset size is in the range that banking shareholders, team members, customers and communities— for the trust and confidence you have placed in us. Our focus remains on consistent, strong, and organic growth and expansion, while continuing to invest in our technology, industry experts consider to be the “sweet spot.” We have the progressive product capabilities, communities, and most resources and capabilities to provide our customers with the importantly, our Enterprise team. Our investment in technology products, services, and technology that are comparable to and product innovation is continuing to make banking more the mega banks, yet we are able to do what the large banks efficient, secure, and user friendly for our customers to improve are unable to do – operate with the local knowledge to meet their overall banking experience. each customer’s unique needs, while truly understanding and caring for our customers, communities, team members, and shareholders. We have operated through numerous economic cycles over our 27-year history. Due to numerous reasons, including our sustained investment in technology, capabilities, training, and most of all people, we have historically found The future has never been brighter for Enterprise Bank. Each year our roots grow deeper and stronger, enabling us to further differentiate ourselves from other banks. As we grow larger and stronger, our resolve to be the best community bank in America only strengthens. unsettled economic times to be opportunities for market share With your continued support, and rooted in the values and growth and branch expansion. Our Future principles on which we were founded, we will continue to build upon our success. While it is impressive and inspiring to see what our Board of Directors and our 475 passionate and On behalf of the Enterprise Bank team, we express our purpose-driven team members achieved in our first 27 years, deepest and our most sincere appreciation to each of you—our we believe that the best is yet to come. Richard W. Main President Jack Clancy Chief Executive Officer George L. Duncan Founder and Chairman 3 With Heartfelt Thanks The Board of Directors of Enterprise Bank would like to express its sincere appreciation to Arnold S. Lerner for his 27 years of dedicated service to Enterprise Bank and Enterprise Bancorp, Inc. Mr. Lerner retired from service as a Director in January 2016. A founding director in 1988, Mr. Lerner has always served with great distinction in the various roles he has held during his tenure, including the roles of Vice Chairman and Lead Director. Mr. Lerner has served as the Chairman of the Corporate Governance/ Nominating, Asset Liability (ALCO), Compensation, and Enterprise Investment Advisory Committees, as well as serving on the Executive Committee and Marketing and Sales Committee. In 2008, the Bank’s boardroom was dedicated in his honor. With his retirement from the boards, Mr. Lerner has been named an Honorary Director. 4 “ Arnold’s diligence, careful oversight, thoughtful deliberation, and the respect he has shown for his fellow board members, our management team, and our employees are unprecedented and have helped to set the culture of the entire organization, now and into the future. George L. Duncan Founder and Chairman ” 5 Our Competitive Advantage. To us, culture is everything! Within the bank we spend extensive Believing in and excelling at these operating principles is our time talking about the operating principles shown below. Our unique value proposition to our customers and potential new sense of purpose is essentially why we exist and for whom customers. It is what differentiates us from other banks. It is our we strive to create success. Our values and our behaviors are culture and it is our “strategy.” what we believe in and how we should behave. Our behaviors are demonstrated through a high level of caring, trust, respect, integrity, excellence, pride, and teamwork. Advanced Capabilities Organic Growth Expansion Independence Vision Long-Term View Sense of Purpose Customer Focus Community Leaership Customer Service Values People Behaviors Recap of some brief 2015 Highlights » Bank assets grew by $263 million, or 13%. » Deposits grew by $228 million, or14%. » Loans outstanding grew by $187 million, or 11%. » We broke ground on our second Nashua branch— our 23rd branch—and look forward to opening in June of 2016. » Continually striving to make banking more convenient and secure, Enterprise Bank was pleased to introduce Apple Pay® to our Debit Card customers. Accepted at hundreds of thousands of retail partners, Apple Pay’s unique security features help protect against fraud by generating unique virtual card numbers for every Debit Card transaction—adding even more convenience and security to the Enterprise banking experience. » Several branches celebrated exciting anniversary milestones. Commemorating the 20th anniversary of the opening of our Leominster branch, we launched the “20 Weeks of Giving” program, celebrating and giving thanks to the people and businesses of North Central Massachusetts by donating $1,000 each week for 20 weeks to deserving local non-profit organizations chosen by community members. Our 20th anniversary branch celebration in Billerica commemorated completion of extensive branch renovations to improve the customer experience. We were honored to celebrate the 15th anniversaries of our branches in Drum Hill (Chelmsford) and North Billerica, and the 10th anniversaries of our branches in Salem, NH, and Tewksbury Center. » For the second consecutive year, Enterprise Bank was named SBA 504 Lender of the Year for New Hampshire. Enterprise ranked #1 in loans originated in the state of New Hampshire and #2 for dollars loaned, under the Small Business Administration’s 504 Program. » Enterprise Bank was recognized by the Boston Business Journal during its annual “Corporate Citizenship Summit” as #2 among Massachusetts companies for hours spent by employees in community service (averaging nearly 56 hours per employee). » Congratulations to the entire Enterprise Bank team for once again being named one of the Top Places to Work by the Boston Globe. Enterprise Bank was honored to be ranked #4 among all large- sized companies. 6 Key Financial Growth Stats 2015 Growth Annual Growth Rates Through December 31, 2015 % Growth $ Growth Bank Assets Loans Outstanding Customer Deposits Net Income 13% 11% 14% 10% $263 Million $187 Million $228 Million $1.5 Million Shown here is our percentage and absolute dollar growth for 2015. Last 5 Yrs Last 10 Yrs Last 15 Yrs Assets Loans Customer Deposits Net Income 10% 10% 9% 9% 10% 10% 10% 7% 10% 13% 10% 11% Because of the effect of compounding, 10% annual growth results in 61% total growth over five years and a doubling in size in a little over seven years. Quarterly Dividend Through March, 2016 $0.52 $0.500 $0.450 $0.400 $0.350 $0.300 $0.250 $0.200 $0.150 $0.100 $0.050 $0.025 $0.025 1992 2003 2016 This plots our annualized dividend per share by year since we started paying a dividend in 1992. We are one of only two banks in all of America who have increased their dividend by at least 4% every year for the last 24 years. 7 Deposits Total Loans ($ in billions) (Excluding Brokered Deposits) $1.47 $1.33 $1.68 $1.58 ($ in billions) $1.91 $1.36 $1.25 $1.86 $1.67 $1.52 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Net Income Total Assets Total Assets Under Management ($ in millions) ($ in billions) $16.1 $14.7 $13.5 $12.4 $10.9 $3.04 $2.76 $2.59 $2.33 $2.29 $2.06 $2.02 $1.85 $1.67 $1.49 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 8 Selected Financial Data Years Ended December 31 EARNINGS DATA Net interest income Provision for loan losses Net interest income after provision for loan losses Non-interest income Net gains on sales of investment securities Non-interest expense Income before income taxes Provision for income taxes Net income COMMON SHARE DATA Basic earnings per share Diluted earnings per share Book value per share at year end Dividends paid per share Basic weighted average shares outstanding Diluted weighted average shares outstanding 2015 2014 2013 2012 2011 $ 78,294 $ 71,230 $ 65,791 $ 61,910 $ {dollars in thousands, except per share data} 3,267 75,027 13,139 1,828 65,732 24,262 8,114 1,395 69,835 12,813 1,619 62,031 22,236 7,585 3,279 62,512 12,553 1,239 55,824 20,480 6,951 2,750 59,160 11,939 236 52,612 18,723 6,348 16,148 $ 14,651 $ 13,529 $ 12,375 $ 1.56 $ 1.45 $ 1.37 $ 1.29 $ 1.55 17.38 1.44 16.35 1.36 15.14 1.28 14.42 0.50 $ 0.48 $ 0.46 $ 0.44 $ $ $ $ 58,326 5,197 53,129 11,151 791 48,966 16,105 5,161 10,944 $1.16 1.16 13.45 0.42 10,323,016 10,118,762 9,862,678 9,586,783 9,401,714 10,389,934 10,209,243 9,950,609 9,660,676 9,445,725 YEAR END BALANCE SHEET AND OTHER DATA Total assets $ 2,285,531 $ 2,022,228 $ 1,849,925 $ 1,665,726 $ 1,489,163 Loans serviced for others 71,272 64,122 72,711 75,854 67,367 Investment assets under management Total assets under management Total loans Allowance for loan losses Investment securities Interest-earning deposits and fed funds Deposits (including brokered deposits) Borrowed funds Subordinated debt Total stockholders’ equity RATIOS Return on average total assets Return on average stockholders’ equity Allowance for loan losses to total loans Stockholders’ equity to total assets Dividend payout ratio 678,377 674,604 667,330 592,355 505,163 $ $ $ $ 3,035,180 1,859,962 29,008 300,358 $ $ 2,760,954 1,672,604 27,121 245,065 $ $ 2,589,966 1,524,056 26,967 215,369 $ $ 2,333,935 1,359,655 24,254 184,464 2,061,693 1,245,428 23,160 140,405 19,177 10,102 12,371 14,728 8,900 2,018,148 1,768,546 1,635,992 1,475,027 1,333,158 53,671 14,822 180,327 58,900 10,825 166,950 36,534 10,825 151,334 26,540 10,825 139,549 4,494 10,825 127,448 0.76% 9.29% 1.56% 7.89% 32.05% 0.76% 9.20% 1.62% 8.26% 33.10% 0.78% 9.32% 1.77% 8.18% 33.58% 0.78% 9.27% 1.78% 8.38% 34.11% 0.75% 8.98% 1.86% 8.56% 36.21% 9 Valued, Long-term Relationships Challenge Unlimited at Ironstone Farm provides beneficial therapy for people with a wide range of physical, emotional, and cognitive disabilities, using the horse’s unique ability to enhance a person’s movements, inspiring strength, hope and encouragement for more than 10,000 children and adults since their inception. When Challenge Unlimited first sought to acquire Ironstone Farm more than 15 years ago, Enterprise Bank was “Enterprise Bank understands the challenges facing non- profits and they know how to help non-profits succeed. They have been with us every step of the way, providing advice, energy, enthusiasm and expertise, from the moment that we first considered the possibility of acquiring Ironstone Farm. When we face a challenge or problem, they find a way to solve it. We simply couldn’t have done any of this without Enterprise Bank.” Deedee O’Brien “Any bank can offer a loan. At Enterprise Bank, we there to provide commercial lending and financial offer long-term relationships that enable non-profits guidance—and has been a trusted partner ever since. to succeed and fulfill their mission in improving our In addition to financing multiple property acquisitions communities. That means thinking outside the box and expansions, Enterprise Bankers have supported and finding creative solutions that make sense from Challenge Unlimited events and served on its board a financial and sustainable perspective.” and advisory council. Richard Chávez Senior Vice President, Commercial Lending Enterprise Bank Pictured above: Richard Chávez, Enterprise Bank; Deedee O’Brien, Challenge Unlimited 10 “ Creative solutions that make sense” Deedee O’Brien Executive Director Challenge Unlimited at Ironstone Farm Andover, MA 11 12 “ Hands-on personalized service” John Albert President, CEO Kristine DiFiore Vice President, Human Resources Home Health Foundation Lawrence, MA Customized Solutions Home Health Foundation—comprised of a family of agencies including Home Health VNA, Merrimack Valley Hospice, and HomeCare, Inc.—together form a comprehensive continuum of quality home health and hospice care for infants, children, adults, and elders in both home and community settings. For over 120 years, their skilled home care and hospice professionals serve more than 100 cities and towns of the Merrimack Valley, northeastern Massachusetts, and southern New Hampshire. Enterprise Insurance Services, in collaboration with HUB International New England, LLC, is privileged to provide employee health benefits for the 700 employees of Home Health Foundation. “Enterprise Bank is a true partner with a commitment to hands-on personal and personalized service. Understanding our staff’s needs along with our operational goals, they have put together a customized plan that works for our employees and also produces cost savings for the organization. Enterprise Bank doesn’t just talk about great service—they deliver it.” John Albert and Kristine DiFiore “At Enterprise Bank, we navigate the complexities of the healthcare insurance system to create customized benefits that maximize value for both the organization and its employees. It is our privilege to provide quality health care benefits to the employees of Home Health Foundation, which is committed to providing quality health care for our region.” Jim Moriarty Senior Vice President Enterprise Insurance Services/ HUB International New England, LLC Pictured left: Jim Moriarty, Enterprise Bank; and Kristine DiFiore and John Albert, Home Health Foundation *Insurance products are not a Deposit, not FDIC insured, not guaranteed by Enterprise Bank, not insured by any government agency, and may lose value. 13 “ Improved efficiency, saving time and money” Douglas Barry President, CEO Humane Society for Greater Nashua Nashua, NH “Switching to Enterprise Bank for our banking needs has improved efficiency, saving us time and money. Enterprise is a perfect match: large enough to provide the capabilities we need, while still having the personal service of a local community bank. Bigger banks just can’t provide that level of service or the level of commitment to the community. That’s important to us.” Douglas Barry “It is important for Enterprise Bank to serve the non-profit organizations that serve the Greater Nashua community. When we Investing in Community provide cash management services for The Humane Society for Greater Nashua, a thriving animal shelter an organization like the Humane Society serving New Hampshire and Northern Massachusetts, has a mission to for Greater Nashua, we also serve as an advocate for and enhance the lives of animals entrusted to their care while advocate, advisor, and financial counselor educating the community to strengthen the human and animal bond. Staff to support them in their mission. That’s the and volunteers care for and raise funds for more than 2,700 pets each Enterprise way.” Deborah Novotny Vice President, Commercial Lending Officer Enterprise Bank year, providing services including pet adoptions, dog and cat transports, low-cost spay/neuter and vaccine clinics, multi-level dog training, and cremation and burial. Enterprise Bank’s cash management services have helped the shelter increase efficiency and maximize resources. Pictured right: Douglas Barry, The Humane Society for Greater Nashua; Brenda McDougald, AVP, Regional Business Advisor, Deborah Novotny, Enterprise Bank; and Theo, who has been successfully adopted. 14 15 16 “ The solution is just a phone call away” Charlie Beaulieu Treasurer Mammoth Fire Alarms, Inc. Lowell, MA Foundation of Trust Since 1991, Mammoth Fire Alarms, Inc. has earned its reputation as the leading independent fire alarm equipment distributor and provider of fire protection and life safety. Responding to the demand from today’s businesses for flexible fire and life safety alternatives, Mammoth Fire Alarms has created MFA’s 1 Stop, combining unsurpassed product knowledge with fire alarm, fire suppression service, and central alarm monitoring capabilities to create a comprehensive fire and life safety solution for today’s business owners. Enterprise Bank has been proud to provide banking services for Mammoth Alarms since the company’s inception 25 years ago. “With Enterprise Bank, no matter how big the “As a community bank, we take seriously our role in problem is, the solution is just a phone call away. helping businesses grow and develop, strengthening You can’t put a price on that kind of service. They their financial foundation as they strengthen the go above and beyond what we ask for, looking out communities they serve. We measure our success for us and advising us. They have earned our trust by their success.” and loyalty, and personally and professionally, we won’t bank with anyone else. Period.” Charlie Beaulieu Bill Collins Senior Vice President, Senior Commercial Lending Officer Enterprise Bank Pictured left: Bill Collins, Enterprise Bank; Charlie Beaulieu and Diane Beaulieu, Mammoth Fire Alarms, Inc. 17 Fast, Secure Technology “I haven’t met anyone who understands the ACH industry as well as the team at Enterprise Bank. They know the ACH cash management business and provide exceptional service to back it up. Our clients demand accurate, secure, and consistent service from us, and that’s exactly what we get Payright Payroll offers tailored workforce solutions from Enterprise Bank. We are able to deliver to our for businesses of all sizes, ranging from basic payroll clients because Enterprise delivers to us.” processing to integrated solutions incorporating payroll processing, human resources, time and attendance, and employee benefits. Established in 1989 and today serving more than 1,300 clients, Payright’s mission is providing quality service, reasonable prices, and a user- friendly environment for their clients, utilizing the latest technology available to help manage payroll and human resource needs. Enterprise Bank is pleased to support Payright Payroll through Automated Clearing House (ACH) and cash management services. Stephen McMahon “We understand the importance in enabling Payright Payroll to consistently deliver thousands of accurate, secure, and time-critical direct deposit and check payments for their customers. Our job is to ensure that Payright Payroll delivers, and that’s a promise we keep.” Steve Dolan Vice President, Senior Cash Management Advisor Enterprise Bank Pictured above: Stephen McMahon, Payright Payroll; and Steve Dolan, Enterprise Bank 18 “ Enterprise delivers to us” Stephen McMahon President Payright Payroll Acton, MA 19 “ Timely, responsive and quality service” 20 Peter and Sal Napoli Owners The Napoli Group, LLC Amherst, NH Focus on the Customer The Napoli Group, LLC, based in Amherst, New Hampshire, operates McDonald’s restaurants throughout the Northeast. The Napoli Group’s goal is simple—to provide their customers with hot and fresh food, and fast and friendly service in a contemporary restaurant experience. The Napoli Group is proud of their commitment to their customers and to the communities in which they do business, giving back to their communities through support of hundreds of local non-profit organizations. Enterprise Bank has been proud to provide lending, cash management, and deposit services for The Napoli Group for the past 10 years. “We need a bank to provide us with the same timely, responsive and quality service that we provide our customers. We get that with Enterprise Bank. The people, service, and attention to our needs are impeccable. I haven’t met one person at Enterprise Bank that I wouldn’t hire myself.” Peter and Sal Napoli “Enterprise Bank understands the importance of fast service and responsiveness in providing quality deposit, lending, and cash management services for our busy customers— and we deliver.” Peter Rayno Executive Vice President, NH Banking and Lending Director Enterprise Bank Pictured far left: Peter Napoli, The Napoli Group; Peter Rayno, Enterprise Bank; Sal Napoli, The Napoli Group; and Sheryl Parsons, Regional Manager of Enterprise Bank Pictured left: Peter and Sal Napoli of The Napoli Group 21 Growing Businesses Founded in 2004 by Hector Echaniz and Marco Barbier Easypak™ LLC based in Leominster, Massachusetts, is an international manufacturer of plastic packaging products and a provider of packaging services that go beyond just a plastic container. Easypak provides flexible packaging solutions tailor-made to meet their customers’ needs, from single- material clamshell deli containers to complex, multi-layer-material containers. Enterprise Bank has proudly provided industrial and commercial lending services for the construction and expansion of Easypak’s Leominster facilities. “It is important to us to work with a local bank that is connected to the community. We are not just a number; they take time to know us and know our business. The bank has grown as we have grown and is an important partner in our growth. We have great trust in Enterprise Bank.” Marco Barbier “We work closely as a team to help our client’s business grow and increase profitability, prudently and responsibly, providing customized commercial lending services that focus on the client’s long-term success and sustainability.” Raymond LaFond Senior Vice President/Commercial Lending Manager Enterprise Bank Pictured right: Marco Barbier and Hector Echaniz of Easypak™. Pictured far right: Raymond LaFond, Enterprise Bank; and Hector Echaniz and Marco Barbier, Easypak™ 22 “ An important partner in our growth” Marco Barbier Managing Partner Easypak™ LLC Leominster, MA 23 24 “ A Wonderful Experience” Tom Walsh President KSA Realty LLC Andover, MA Creating Opportunities Located in historic Andover at 429 South Main Street, Town Market Andover is a new local community destination serving great food with neighborhood hospitality, offering freshly-made prepared foods, artisan farm products, craft beer and wine, locally roasted coffee and loose-leaf tea, bakery sweets, and farmstead ice cream. Founded by Andover residents, Town Market creates a community gathering space where families and friends can start new traditions and enjoy the simple pleasures in life. Enterprise Bank was proud to finance the construction of this new Andover destination and looks forward to working with developer Tom Walsh on future Town Markets. Pictured left: Tom Walsh, KSA Realty LLC; Marlene Hoyt, Enterprise Bank; and David Deloury, KSA Realty LLC “For an entrepreneur, it is a very challenging process to simultaneously put up a building and build the business that will occupy it. Enterprise Bank was a wonderful partner during this process, always available and able to accommodate my schedule. Other banks talk about great service, but Enterprise Bank walks the talk. It’s been a wonderful experience and I look forward to expanding our relationship.” Tom Walsh “At Enterprise Bank, we are fully committed to our clients, from original concept through project completion, no matter how complex or challenging. We serve as a trusted advisor each step of the way, setting up our clients to succeed.” Marlene Hoyt Senior Vice President Construction Lending Manager Enterprise Bank 25 Experience and Expertise Applewild School is a private, independent elementary and middle school in Fitchburg, “Enterprise Bank is privileged to work with the committed educators at Applewild School, using our experience and expertise to protect and preserve their assets, helping them to build a strong financial Massachusetts. Dedicated to helping students uncover foundation for future generations.” their passion for learning, Applewild School strengthens Patrick Connerty and prepares students to be thoughtful, collaborative, engaged and involved individuals in the world. Through wealth management and investment services, Enterprise Investment Advisors serves as stewards and trusted advisors for Applewild School’s endowment, providing guidance and advice for the organization’s long-term success. Enterprise Bank’s philanthropic support has helped provide financial assistance for students who otherwise might not have access to an Applewild education. Senior Vice President, Senior Relationship Manager Enterprise Investment Advisors “The people make Enterprise Bank what it is: a true partner focused on personal, long-term relationships. They know us and understand us, and they go above and beyond in protecting our best interest. Their business is to make it possible for us to do our business—educating and engaging students to be independent, motivated, intellectually curious young people. We have tremendous confidence and trust in the financial experts at Enterprise Bank.” Christie Stover Investment products are not a Deposit, not FDIC insured, not guaranteed by Enterprise Bank, not insured by any government agency, and may lose value. 26 “ They know us and understand us” Christie Stover Head of School Applewild School Fitchburg, MA 27 “ Creative ways to make our vision a reality” Dan Gainsboro Developer Concord Riverwalk Concord, MA 28 Celebrating the Entrepreneurial Spirit Concord Riverwalk is an intimate neighborhood of 13 smart, high-performance homes in Concord, Massachusetts, designed by NOW Communities, LLC with a focus on convenience, energy efficiency, connected living, beauty, and value. A “pocket neighborhood” celebrating the natural environment and fostering a sense of community, Concord Riverwalk earned the prestigious “Community of the Year” award by the National Association of Home Builders. Enterprise Bank provided construction lending services to NOW Communities and developer Daniel Gainsboro and is honored to be working with them on a new smart, sustainable development in Devens, Massachusetts. “Enterprise Bank understands my needs as a “At Enterprise Bank, we give entrepreneurs and developer. They took the time to get to know us and developers the opportunity to do something truly our vision, and they came up with creative ways to unique and different. We give them the honest financial make our vision a reality in a challenging economy advice and expertise to help them succeed in fulfilling and an unproven market. Their accessibility and their dreams and changing the world.” responsiveness is incredible. They handle the tough questions and find the financial solutions so that I can Ryan Dunn Senior Vice President, Regional Commercial Lending Manager focus on building the next community.” Cheryl Stafford Dan Gainsboro Senior Vice President, Senior Construction Lender Enterprise Bank Pictured above: Ryan Dunn, Enterprise Bank; Dan Gainsboro, NOW Communities; and Cheryl Stafford, Enterprise Bank 29 Branches Our expanding market includes opportunities for future MManchester Manchester nManchesteter nchester Derry Derry growth. In order to best serve our growing customer base, 3 3 Enterprise Bank seeks out convenient branch locations throughout the Greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. Nashua Nashua Branch locations are shown in green. Our second Nashua Branch will be opening soon at 493 Amherst Street ur Pri m O a r y Servic e A r e a NEW HAMPSHIRE NEW HAMPSHIRE MASSACHUSETTS MASSACHUSETTS 9393 93 Salem Salem 555444495495 495 Hudson Hudson Nashua Nashua Pelham Pelham 3 3 T Tyngsboro Tyngsboro Lowell Lowell Lowell Lowell Chelmsford Chelmsfordford Methuen Methuen e Lawrence Lawrence w Dracut Dracut 5554444495495 495 Tewk sb Tewksbury Tewksbury Andover Andover Fitchburg Fitchburg Chelmsfordrd Chelmsford N. Billerica N. Billerica . B Tewksbury Tewksbury wk 9393 93 2 2 LLeo Leominster Leominster 2 2 555444495495 495 Westford Westford B Billerica Billerica 9019 190 000090 290 A Acton Acton 2 2 3 3 9595 95 1288 128 Boston Boston Boston 90 Enterprise Bancorp, Inc. and Enterprise Bank Board of Directors George L. Duncan Founder and Chairman of the Board James F. Conway III Vice Chairman and Lead Director of the Board; Executive Vice President, RR Donnelley Michael A. Spinelli Secretary of the Board; Founder, Global Tourism Solutions Dr. Carole A. Cowan Past President, Middlesex Community College Normand E. Deschene President and Chief Executive Officer, Circle Health and Wellforce John T. Grady, Jr. Senior Advisor, Moelis & Company Michael T. Putziger Chairman, WinnCompanies and of Counsel, Murtha Cullina, LLP Carol L. Reid Retired Financial Executive GENERAL COUNSEL Philip S. Nyman Mary Jane King SEC & REGULATORY COUNSEL President, Conway Management Company Hunton & Williams Eric W. Hanson Assistant Secretary of the Board; Chairman of the Board and Chief Financial Officer, Klin Groupe, LLC Gino J. Baroni John A. Koutsos President, Alec’s Shoe Store, Inc. Joseph C. Lerner Co-Founder and Managing Partner, Cycle Power Partners Owner and Managing Principal, Trident Project Advisors and Development Group Richard W. Main President, Enterprise Bank John P. Clancy, Jr. Chief Executive Officer, Enterprise Bank Dr. Jacqueline F. Moloney Chancellor, University of Massachusetts Lowell John R. Clementi Chief Executive Officer, Longview Development, LLC Luis M. Pedroso Co-Founder, President, and Chief Executive Officer, Accutronics, Inc. FINANCIAL CONSULTANT Raymond L. Anstiss, Jr., CPA TRUST & INVESTMENT MANAGEMENT COUNSEL George B. Leahey HONORARY BOARD MEMBERS Kathleen M. Bradley Nancy L. Donahue Lucy A. Flynn John P. Harrington Arnold S. Lerner Charles P. Sarantos Nickolas Stavropoulos 30 MAINENEW HAMPSHIREVERMONTMASSACHUSETTSCONNECTICUTRHODE ISLAND222 Merrimack Street, Lowell, Massachusetts 01852 978-459-9000 22 Convenient Locations in: Massachusetts: Acton » Andover » Billerica » Chelmsford » Dracut » Fitchburg » Lawrence » Leominster » Lowell » Methuen » Tewksbury » Tyngsborough » Westford New Hampshire: Derry » Hudson » Nashua » Pelham » Salem Our second Nashua Branch will be opening soon at 493 Amherst Street Investor Relations Enterprise Bancorp, Inc. 222 Merrimack Street, Lowell, MA 01852 978-459-9000 | shareholders@ebtc.com Transfer Agent and Registrar Shareholders who have questions regarding their ownership of Enterprise Bancorp, Inc. stock should contact the Registrar: Computershare Investor Services P.O. Box 30170, College Station, TX 77842 1-888-218-4390 Annual Meeting The 2016 Annual Meeting of shareholders will be held on May 3, 2016 at 3:30 p.m. at the UMASS Lowell Inn & Conference Center 50 Warren Street, Lowell, MA 01852 info@ebtc.com » EnterpriseBanking.com The common stock of Enterprise Bancorp, Inc. is traded on the NASDAQ Stock Market under the symbol “EBTC.” Our Purpose The Enterprise Bank team helps create successful businesses, jobs, opportunities, wealth, and vibrant, prosperous communities. EnterpriseBanking.com ENT-MKT76 002CSN5FFF 

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